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Delhi Airport Express GROUP NO 3 JASDEEP SINGH 111018 P SWETHA 111030 VAIBHAV BAWEJA 111056 VINAY DHOK 111059

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GROUP NO 3JASDEEP SINGH 111018 P SWETHA 111030 VAIBHAV BAWEJA 111056 VINAY DHOK 111059

Delhi Airport Metro Express LineDMRCs first PPP projectCivil part was handled by DMRC 60% of project

January 2009 Reliance Infrastructure get 30 year contract

Project finalised in 2006

Construction started in November 2007

Operation started in February 2011

Indias first high speed metro rail

Covers 23 km & 6 stations in 18 minutesRuns from New Delhi Railway station to Dwarka through IGI Airport

17 km of journey is through underground tunnel

Delhi Airport Metro Express LineStations New Delhi Distance From New Delhi 0 km Underground/Elevated Type & Facility Underground Terminal Station with full passenger check-in & Baggage check-in facility Intermediate Station with only passenger check-in facility & Baggage check-in facility Intermediate Station with only passenger check-in facility Intermediate Station with only passenger check-in facility Intermediate Station Terminal Station

Shivaji Stadium(CP)

2 Km

Underground

Dhaula Kuan

8.5 Km

Elevated

Delhi Aerocity (Mahipalpur)Airport(Terminal 3) Dwarka Sector 21

15.8 Km

Underground

19.2 Km 22.7 Km

Underground Underground

Need for a Delhi Airport LinkCWG would bring additional traffic to/fro airport Rapid Population Growth in Delhi Requirement of a mass transit system to link airport with Delhi city

More vehicles causing traffic and pollution

Lack of Good Public Transit System Passenger movement to/fro airport by private vehicles

Contract with Reliance InfraAuthority : Cost of project (in INR): Delhi Metro Rail Corporation Ltd. (DMRC) 5800 crores

Concessionaire

Special Purpose Vehicle (SPV) Delhi Airport Metro Express Pvt. Ltd. (DAMEPL), a Special Purpose Vehicle formed by Reliance Infrastructure in consortium with CAF of SpainBuilt Operate Transfer (BOT) Rs 946 crores Provided by Authority

Delivery : O&M Cost for 30 Years(in INR): Land:

Length :Concession Period : Award Date :

22.7 Km (17Km Underground and 5.7km on elevated section)30 years January 2008

Parties InvolvedSl No. 1 2 Company Name Delhi Metro Rail Corporation Reliance Infrastructure Role played in project Authority Concessionaire - 95% of equity in project, EPC Contractor 3 CAF, Spain Concessionaire - 5% equity in project, Supply of metro cars 4 5 6 Siemens, Faiveley Indra, Spain Alcatel Supply of automatic doors for stations Supply of ticketing machines Communication Systems

Terms of ContractObligations of Authority (DMRC) Providing right of way and necessary clearances prior to handing over to Delhi Airport Metro Express Pvt Ltd Concessionaire Scope (DAMEPL) Design, Procurement of systems and equipment, Developing, Financing, Installing, Operation, Maintenance and eventually Transfer of systems related to the Delhi Airport Express Payment of Concession fee to DMRC during the operation of the service Ownership for risks: Traffic Risk Revenue collection risk Project completion risk Operation Risk the concessionaire had to pay a concession fee of Rs51 crore per year The Revenue Sharing arrangement was as follows: 1% of gross revenue to be paid from first year to fifth year 2% of gross revenue to be paid from sixth year to tenth year 3% of gross revenue to be paid from eleventh year to fifteenth year 5% of gross revenue to be paid from fifteenth year to expiry

Acquisition and clearing of land to be handed over to concessionaire Tunnelling and Civil Works for Underground segment, which will be handed over to DAMEPL

Demand ForecastS. No. Mode of Transport Time Price Remarks

1

Cabs

1:45 hr

Rs. 600

Primary Target segmentThe time taken by Bus is too long Variation in travel time is too much

2

Bus

2:15 hr

Rs. 50

3

Auto-Rickshaw

2:00 hr

Rs. 250

4

DMRC

1:00 hr

Rs. 32+20 (Airport DMRC metro goes line) up to Dwarka Sector-21.

T3 Terminal and 6 stationsMarket ShareDeparture Schedule of First & Last Train from New Delhi and Dwarka Sector-21 New Delhi Station First Train Last Train 5:34:40 AM 11:33:40 PM Dwarka Sector-21 5:15:00 AM 11:14:00 PMGo Air 7% Spicejet 18%

Air India 17%Jet Airways 21%

Indigo 26%

Airport line express metro cater to the passenger whose flight is in day time. More demand for night flights as cabs are difficult/unsafe International flights are scheduled at night. Metro not functional in night 59% of traffic flies from Terminal 1-D. These consumers are price sensitive low cost carrier users It is difficult to reach Terminal 1-D with the help of airport line metro

Jet Lite Kingfisher 7% 4%

WHAT HAPPENED?

Time line for Delhi Metro Airport Express

August 2006 September 2007 January 2009 March 2009 November 2009 August 2010

Delhi Metro Rail Corp Ltd. finalise the detailed project DMRC awarded first contract for construction DMRC awards 30 year build operate transfer contract to the Reliance. Reliance Infrastructure Ltd (R-Infra) formed a special purpose vehicle named Delhi Airport Metro Express Pvt. Ltd to build airport line from new Delhi railway station to IGI airport. DMRC completed 95% of civil construction work and was ready to hand over the site to R- Infra for laying tracks. R-Infra misses first deadline to start the operations and one month time was gives as DMRC delayed in handing over the station. The express line failed to get clearance from commissioner Metro Rail Safety (CMRS). DMRC fined R-Infra Rs.37.5 lakh per day for missing the deadline. CMRS gives safety clearance to the airport express, except for the Dhaula Kuan and Delhi Aerocity stations. The airport line started its operation from New Delhi railway station to IGI airport.

September 2010

January 2011 February 2011

August 2011

CMRS grants safety clearance to Dhaula Kuan and Delhi Aerocity stations

December 2011

DMRC managing director meets R-Infra executives to discuss the areas that need improvement.

May 2012 June 2012

DMRC chief expresses dissatisfaction with the performance of operations. DMRC hire consultants to conduct a detailed inspection of the tracks due to safety concerns.

July 2012

The R-Infra suspends services indefinite duration for safety repairs. The ministry of urban development form a two member committee to probe the defects in the civil construction of the railway line

Why was service called off?DMRCs StandConsultant Found defect in civil construction DMRC is blaming R-Infra for negligence in inspection

R-Infras StandCivil defects were present from the beginning and R-Infra had already pointed out to DMRCDMRC did not work upon the issues The project was not handed over at scheduled time Conditions are not suitable for operation

540 out of 2100 bearing were defective Supporting clips was found damaged Speed slowed down to 80 from 105 over security concern Operation was getting risky

There are no serious damages so as to call off the operations All the issues are under acceptable level R-Infra are using civil defects as exit route

They do not want to go further in DMRC forced procurement from PPP approved vendor Gurgaon extension is scrapped

R-Infra was not getting revenue even after higher investment

Was the project viable in the first place?Ridership projections by DPR for 2011 45000 with 7.3% annual growth but past figures show no such growth Actual ridership in 2011 15000 DAMEPL relied on DMRC provided study Inconvenient location of stations, impact of economical and political factors Only T3 terminal is connected Estimated non-fare revenue to 75% (38% for MTR Hongkong)

Issues in Contract All risks passed on to concessionaire DMRC assumed the role of regulator Penalty on Reliance Infra by DMRC for delay Concession fee and revenue percentage from handover stage

Quality Civil construction done by DMRC DMRC forced procurement from approved vendor only Seepage and mud was issue in tunnel 90% of supporting clips has been changed Speed slowed down to 80 from 105 DMRC estimated Rs.20 Crore budget for repair

Exit Route If R-Infra defaults, it will pay 20% of loan with equity If DMRC defaults, it will pay 130% of debt and equity

Closing NoteE Sreedharan suggested the Govt. that PPP model wouldnt workReliance Infra has over estimated market demand for express line DMRC is not only the authority in the project but also is trying to assume the role of a regulator Both R-Infra and DMRC are reluctant to work under PPP with each other Reliance floated a SPV and transferred the losses to the SPV. This puts the doubt on the intension of the Reliance After the operating the metro for over a year, Reliance closed the operation citing the safety issues Maintenance estimates by DMRC is Rs20 crore which is comparatively a small fee compared to the capital invested on the project Reliance is trying to exit PPP contract by blaming DMRC for adopting poor construction measures